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Outbyte PC Repair FREERepair Windows errors before they cause bigger problemsFix Now →Outbyte Driver Updater FREEFix the driver behind crashes, sound loss and screen glitchesFind Drivers →The September 11 attacks destroyed or damaged offices used by Lehman Brothers, disrupted Merrill Lynch’s downtown operations and displaced American Express from its World Financial Center headquarters. The firms responded by shifting staff and work to backup locations, but their filings measured the human and financial effects differently: the published figures are not a like-for-like ranking of total losses.
What the three firms reported
| Firm | Human impact and property | Operational response | Disclosed financial effects |
|---|---|---|---|
| Lehman Brothers | Its leased World Trade Center facilities were destroyed; its leased and owned World Financial Center facilities were significantly damaged. The damaged facilities included a building jointly owned with American Express. The reviewed filing does not give a comparable employee-death count. (Lehman Brothers Holdings Inc., 2002 Form 10-K.) | Downtown employees and operations were displaced. Lehman shifted key activities and support functions to backup facilities in New Jersey and other temporary sites, bought a Midtown building in late 2001, and later decided to exit its downtown facilities. (2002 Form 10-K.) | The company reported a $76 million pretax charge in 2001 ($42 million after tax) for damaged, destroyed or abandoned property, recovery efforts and idle time, and redeployment. In 2002 it reported a $108 million pretax net insurance recovery ($60 million after tax), after prior recoveries and costs. The separate $700 million insurance settlement was the policy limit, not a measure of total loss. (2002 Form 10-K.) |
| Merrill Lynch | Approximately 9,000 employees were temporarily relocated from the World Financial Center headquarters and offices at 222 Broadway. (Bank of America 2002 Annual Report, filed in 2003.) | Employees moved to backup facilities. The disclosure describes a temporary relocation, rather than a single permanent replacement site. (Bank of America 2002 Annual Report.) | Merrill’s later annual-report disclosure lists September 11 expenses of $176 million in 2001 and $95 million in 2002. It separately says $71 million of 2001 expenses were net of $105 million in insurance recoveries, and describes total recoveries of $255 million. These are differently framed expense and recovery figures; they should not be added together as though they were one net loss. (Bank of America annual-report excerpt.) |
| American Express | The company was displaced from its World Financial Center headquarters. Its 2001 annual report says 11 employees who worked at the World Trade Center died; that is a specific count for those employees, not a combined casualty figure for all three firms. | American Express said servicing centers outside New York City kept business operations running without interruption immediately after the attacks. | Its 2001 Form 10-K describes reduced corporate and consumer spending, travel and investment activity, but the reviewed materials do not establish a comparable total 9/11-related cost for American Express. |
The company details above come from Lehman Brothers Holdings Inc.’s 2002 Form 10-K, Merrill Lynch and Bank of America annual-report disclosures, and American Express Company’s 2001 Form 10-K and annual report. The reports describe different accounting categories and scopes; their figures do not support a single combined loss total or a reliable ranking of which firm was hit hardest.
How the attacks affected Lower Manhattan’s business base
The firms’ disruptions were part of a much wider shock. The Federal Reserve Bank of New York’s 2001 annual report estimated that more than 13 million square feet of office space had been destroyed and approximately 100,000 employees across almost 1,300 businesses were displaced. Those are regional estimates, not totals for the three companies.
The report described the sharpest immediate effects in financial services, retail, travel and tourism. New York City lost more than 50,000 private-sector jobs in October 2001, followed by further declines of 10,000 in each of November and December. The city’s private-sector job count fell by more than 70,000 in the fourth quarter overall. Some of the financial-sector employment decline coincided with a net gain of about 13,000 workers in New Jersey, as firms and employees found locations outside the city.
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The attacks intensified an existing downturn; they did not start every weakness that followed. The New York Fed said financial activity in New York City and New York State had peaked in January 2001 and declined modestly before September. Its account therefore distinguishes the pre-attack contraction from the additional damage, displacement and job losses caused by the attacks.
Why damaged offices did not mean the financial system stopped
Office destruction and staff displacement disrupted particular firms, but core financial infrastructure continued to function. The New York Fed wrote: “The basic dollar payments systems never closed.” Government-securities trading effectively stopped on September 11 and 12, while settlement continued; within 48 hours, the Fed said, markets were again serving their function.
The Federal Reserve’s October 24, 2001 Beige Book also recorded disruption at some financial institutions from market closures and limited overnight and express-mail deliveries caused by security precautions. It described Manhattan’s office market as unsettled by nearby destruction and damage while displaced firms sought space in Manhattan and New Jersey. That account helps explain the difference between business continuity at the system level and the serious operational disruption individual companies faced.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What the company figures can—and cannot—establish
Lehman’s charge, net recovery and insurance settlement describe separate accounting items. The settlement was capped by the policy limit; it should not be treated as proof that insurance covered all damage, displacement or other consequences. Merrill’s disclosures likewise distinguish expenses across years from insurance recoveries, including an amount expressly reported net of recoveries. Adding gross expenses, net expenses and total recoveries would mix unlike measures.
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American Express’s report emphasizes business conditions, headquarters displacement and continuity, rather than a comparable total cost. The available company disclosures also do not provide a consistent death count for all three firms. Merrill’s reported approximately $1.5 trillion in client assets or assets under management at year-end 2001 is a measure of company scale, not a 9/11 loss figure. Its reported 2001 rankings—number one in global equity and equity-linked origination and number two in global announced mergers and acquisitions, according to Thomson Financial Securities Data—are industry rankings, not evidence that the attacks caused or did not cause those results.
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